Loans Held for Investment and Allowance for Credit Losses on Loans (Tables)

6 Months Ended

Jun. 30, 2022

Receivables [Abstract]

Summary of Loans Held for Investment by Portfolio Segment

Loans held for investment are summarized by portfolio segment as follows:

	June 30, 2022		December 31, 2021
	(Dollars in thousands)
Real estate:
Commercial real estate owner occupied	$	893,144	$	775,554
Commercial real estate non-owner occupied		1,162,912		1,095,324
Construction and development < 60 months		436,658		415,466
Construction residential real estate < 60 months		285,090		254,524
Residential real estate first lien		1,072,564		937,006
Residential real estate all other		173,914		161,018
Farmland		266,790		272,179
Commercial and agricultural non-real estate (2)		1,399,702		1,416,093
Consumer non-real estate		439,723		413,370
Oil and gas		482,786		428,908
Total (1)	$	6,613,283	$	6,169,442
(1) Excludes accrued interest receivable of $23.3 million at June 30, 2022 and $21.0 million at December 31, 2021, that is recorded in accrued interest receivable and other assets.
(2) Includes PPP loans held for investment of $3.2 million, net of unamortized processing fees of $0, at June 30, 2022 and $80.4 million, net of unamortized processing fees of $2.0 million, at December 31, 2021.

Summary of Troubled Debt Restructurings and Other Real Estate Owned and Repossessed Assets

The following is a summary of troubled debt restructurings and other real estate owned and repossessed assets:

	June 30, 2022		December 31, 2021
	(Dollars in thousands)
Troubled debt restructurings	$	2,174	$	3,665
Other real estate owned and repossessed assets	$	39,209	$	39,553

Summary of Amounts Included in Nonaccrual Loans Segregated by Portfolio Segment

The following table is a summary of amounts included in nonaccrual loans, segregated by portfolio segment.

	June 30, 2022		December 31, 2021
	(Dollars in thousands)
Real estate:
Commercial real estate owner occupied	$	2,224	$	4,351
Commercial real estate non-owner occupied		—		407
Construction and development < 60 months		101		80
Construction residential real estate < 60 months		103		—
Residential real estate first lien		2,537		2,763
Residential real estate all other		111		280
Farmland		2,540		4,224
Commercial and agricultural non-real estate		5,998		7,569
Consumer non-real estate		98		148
Oil and gas		—		1,070
Total	$	13,712	$	20,892

Age Analysis of Loans Held for Investments

Loans are considered past due if the required principal and interest payments have not been received as of the date such payments were due. The following table presents an age analysis of the Company's loans held for investment:

	Age Analysis of Past Due Loans
	30-59 Days Past Due		60-89 Days Past Due		90 Days and Greater		Total Past Due Loans		Current Loans		Total Loans		Accruing Loans 90 Days or More Past Due
	(Dollars in thousands)
As of June 30, 2022
Real estate:
Commercial real estate owner occupied	$	1,578	$	132	$	726	$	2,436	$	890,708	$	893,144	$	374
Commercial real estate non-owner occupied		—		—		36		36		1,162,876		1,162,912		36
Construction and development < 60 months		2,890		113		33		3,036		433,622		436,658		—
Construction residential real estate < 60 months		—		—		103		103		284,987		285,090		—
Residential real estate first lien		3,688		1,038		2,231		6,957		1,065,607		1,072,564		1,600
Residential real estate all other		644		65		637		1,346		172,568		173,914		618
Farmland		600		281		2,246		3,127		263,663		266,790		1,052
Commercial and agricultural non-real estate		4,029		654		3,522		8,205		1,391,497		1,399,702		496
Consumer non-real estate		2,542		561		526		3,629		436,094		439,723		512
Oil and gas		—		159		83		242		482,544		482,786		83
Total	$	15,971	$	3,003	$	10,143	$	29,117	$	6,584,166	$	6,613,283	$	4,771
As of December 31, 2021
Real estate:
Commercial real estate owner occupied	$	2,046	$	223	$	1,465	$	3,734	$	771,820	$	775,554	$	18
Commercial real estate non-owner occupied		7,244		—		—		7,244		1,088,080		1,095,324		—
Construction and development < 60 months		136		—		—		136		415,330		415,466		—
Construction residential real estate < 60 months		2,264		—		—		2,264		252,260		254,524		—
Residential real estate first lien		3,351		567		2,817		6,735		930,271		937,006		1,704
Residential real estate all other		293		30		451		774		160,244		161,018		431
Farmland		253		37		2,077		2,367		269,812		272,179		139
Commercial and agricultural non-real estate		2,506		546		7,118		10,170		1,405,923		1,416,093		2,418
Consumer non-real estate		1,873		321		272		2,466		410,904		413,370		254
Oil and gas		—		—		—		—		428,908		428,908		—
Total	$	19,966	$	1,724	$	14,200	$	35,890	$	6,133,552	$	6,169,442	$	4,964

Gross Loans Held for Investment by Year of Origination and Internally Assigned Credit Grades

The following table summarizes the Company’s gross loans held for investment by year of origination and internally assigned credit grades :

	Term Loans Amortized Cost Basis by Origination Year
	2022		2021		2020		2019		2018		Prior		Revolving Loans Amortized Cost Basis		Total
	(Dollars in thousands)
As of June 30, 2022
Commercial real estate owner occupied
Grade 1	$	98,837	$	153,898	$	119,189	$	98,981	$	49,907	$	138,353	$	47,977	$	707,142
Grade 2		25,774		33,972		32,759		21,243		10,083		33,359		23,049		180,239
Grade 3		—		42		452		936		341		1,606		212		3,589
Grade 4		—		303		—		851		193		520		307		2,174
Total commercial real estate owner occupied		124,611		188,215		152,400		122,011		60,524		173,838		71,545		893,144
Commercial real estate non-owner occupied
Grade 1		86,546		238,973		183,794		112,077		38,979		104,280		28,735		793,384
Grade 2		58,327		54,276		45,985		49,899		32,181		86,252		29,344		356,264
Grade 3		6,996		—		—		3,158		93		2,814		—		13,061
Grade 4		—		—		—		—		203		—		—		203
Total commercial real estate non-owner occupied		151,869		293,249		229,779		165,134		71,456		193,346		58,079		1,162,912
Construction and development < 60 months
Grade 1		60,042		136,104		42,114		37,833		3,629		5,887		40,046		325,655
Grade 2		18,223		28,205		1,799		14,816		1,733		1,277		43,436		109,489
Grade 3		1,198		—		103		—		—		2		111		1,414
Grade 4		—		—		33		52		—		15		—		100
Total construction and development < 60 months		79,463		164,309		44,049		52,701		5,362		7,181		83,593		436,658
Construction residential real estate < 60 months
Grade 1		119,503		94,469		3,821		26		—		44		31,831		249,694
Grade 2		18,089		14,076		347		—		—		413		1,855		34,780
Grade 3		513		—		—		—		—		—		—		513
Grade 4		—		103		—		—		—		—		—		103
Total construction residential real estate < 60 months		138,105		108,648		4,168		26		—		457		33,686		285,090
Residential real estate first lien
Grade 1		181,536		234,262		162,322		94,607		61,203		157,490		6,396		897,816
Grade 2		23,461		39,031		25,983		14,136		12,264		44,323		—		159,198
Grade 3		1,521		1,492		1,050		1,701		1,826		3,800		—		11,390
Grade 4		—		199		184		525		987		2,265		—		4,160
Total residential real estate first lien		206,518		274,984		189,539		110,969		76,280		207,878		6,396		1,072,564
Residential real estate all other
Grade 1		16,908		13,021		12,762		6,836		4,343		13,031		33,925		100,826
Grade 2		1,990		1,849		1,944		1,761		1,206		2,820		58,388		69,958
Grade 3		185		211		91		67		243		890		589		2,276
Grade 4		—		31		177		—		38		218		390		854
Total residential real estate all other		19,083		15,112		14,974		8,664		5,830		16,959		93,292		173,914
Farmland
Grade 1		26,555		40,429		32,947		21,399		11,001		32,232		6,702		171,265
Grade 2		8,434		16,653		7,470		13,116		6,084		17,368		12,121		81,246
Grade 3		2,267		1,954		1,862		1,778		70		2,409		1,923		12,263
Grade 4		—		1,125		379		—		58		222		232		2,016
Total farmland		37,256		60,161		42,658		36,293		17,213		52,231		20,978		266,790
Commercial and agricultural non-real estate
Grade 1		160,548		271,247		100,081		71,623		22,808		71,498		337,631		1,035,436
Grade 2		46,899		69,950		28,657		17,177		26,250		7,737		145,827		342,497
Grade 3		2,368		2,451		2,144		1,219		1,937		806		7,019		17,944
Grade 4		—		679		234		907		499		1,237		269		3,825
Total commercial and agricultural non-real estate		209,815		344,327		131,116		90,926		51,494		81,278		490,746		1,399,702
Consumer non-real estate
Grade 1		112,598		141,806		55,814		30,229		10,829		3,970		35,949		391,195
Grade 2		13,357		14,002		5,298		4,529		1,395		2,042		5,233		45,856
Grade 3		296		767		405		294		127		97		2		1,988
Grade 4		64		286		87		182		64		1		—		684
Total consumer non-real estate		126,315		156,861		61,604		35,234		12,415		6,110		41,184		439,723
Oil and gas
Grade 1		115,020		101,947		18,040		4,468		1,798		326		152,151		393,750
Grade 2		9,301		5,414		3,681		13,581		17,777		250		30,898		80,902
Grade 3		45		4,733		8		—		—		199		2,080		7,065
Grade 4		—		1,000		—		—		—		—		69		1,069
Total oil and gas		124,366		113,094		21,729		18,049		19,575		775		185,198		482,786
Total loans held for investment	$	1,217,401	$	1,718,960	$	892,016	$	640,007	$	320,149	$	740,053	$	1,084,697	$	6,613,283

Activity in Allowance for Credit Losses on Loans

The following table details activity in the allowance for credit losses on loans for the period presented. Allocation of a portion of the allowance to one category of loans does not preclude its availability to absorb losses in other categories.

	Allowance for Credit Losses
	Balance at beginning of period		Initial allowance on loans purchased with credit deterioration		Charge- offs			Recoveries		Net charge-offs			Provision for /(benefit from) credit losses on loans			Balance at end of period
	(Dollars in thousands)
Three Months Ended June 30, 2022
Real estate:
Commercial real estate owner occupied	$	8,281	$	—	$	(4	)	$	30	$	26		$	(1,362	)	$	6,945
Commercial real estate non-owner occupied		20,674		—		—			—		—			2,263			22,937
Construction and development < 60 months		3,309		—		—			2		2			417			3,728
Construction residential real estate < 60 months		2,164		—		—			—		—			128			2,292
Residential real estate first lien		3,421		—		(5	)		6		1			(39	)		3,383
Residential real estate all other		2,107		—		(36	)		—		(36	)		(20	)		2,051
Farmland		4,383		—		—			—		—			(18	)		4,365
Commercial and agricultural non-real estate		27,724		—		(717	)		30		(687	)		796			27,833
Consumer non-real estate		3,771		—		(153	)		42		(111	)		434			4,094
Oil and gas		11,405		—		—			—		—			(2,098	)		9,307
Total	$	87,239	$	—	$	(915	)	$	110	$	(805	)	$	501		$	86,935
Six Months Ended June 30, 2022
Real estate:
Commercial real estate owner occupied	$	7,568	$	—	$	(20	)	$	78	$	58		$	(681	)	$	6,945
Commercial real estate non-owner occupied		16,987		—		—			—		—			5,950			22,937
Construction and development < 60 months		3,490		—		—			5		5			233			3,728
Construction residential real estate < 60 months		1,092		—		—			—		—			1,200			2,292
Residential real estate first lien		3,076		2		(49	)		13		(36	)		341			3,383
Residential real estate all other		2,104		—		(36	)		402		366			(419	)		2,051
Farmland		4,822		—		—			—		—			(457	)		4,365
Commercial and agricultural non-real estate		28,085		48		(899	)		143		(756	)		456			27,833
Consumer non-real estate		3,734		28		(233	)		80		(153	)		485			4,094
Oil and gas		12,978		—		—			—		—			(3,671	)		9,307
Total	$	83,936	$	78	$	(1,237	)	$	721	$	(516	)	$	3,437		$	86,935

	Allowance for Credit Losses
	Balance at beginning of period		Initial allowance on loans purchased with credit deterioration		Charge- offs			Recoveries		Net charge-offs			Provision for /(benefit from) credit losses on loans			Balance at end of period
	(Dollars in thousands)
Three Months Ended June 30, 2021
Real estate:
Commercial real estate owner occupied	$	6,505	$	987	$	—		$	1	$	1		$	805		$	8,298
Commercial real estate non-owner occupied		19,115		633		(758	)		—		(758	)		(3,952	)		15,038
Construction and development < 60 months		2,943		173		—			2		2			(23	)		3,095
Construction residential real estate < 60 months		1,092		—		—			—		—			(94	)		998
Residential real estate first lien		2,937		117		(9	)		12		3			(136	)		2,921
Residential real estate all other		1,880		—		(30	)		1		(29	)		112			1,963
Farmland		3,088		643		—			1		1			(5	)		3,727
Commercial and agricultural non-real estate		35,439		4,711		(3,442	)		125		(3,317	)		(2,523	)		34,310
Consumer non-real estate		3,421		8		(209	)		86		(123	)		175			3,481
Oil and gas		14,440		—		—			—		—			(4,308	)		10,132
Total	$	90,860	$	7,272	$	(4,448	)	$	228	$	(4,220	)	$	(9,949	)	$	83,963
Six Months Ended June 30, 2021
Real estate:
Commercial real estate owner occupied	$	8,470	$	987	$	—		$	1	$	1		$	(1,160	)	$	8,298
Commercial real estate non-owner occupied		12,318		633		(796	)		—		(796	)		2,883			15,038
Construction and development < 60 months		2,723		173		—			5		5			194			3,095
Construction residential real estate < 60 months		726		—		—			—		—			272			998
Residential real estate first lien		2,822		117		(52	)		27		(25	)		7			2,921
Residential real estate all other		2,236		—		(46	)		4		(42	)		(231	)		1,963
Farmland		3,153		643		—			1		1			(70	)		3,727
Commercial and agricultural non-real estate		34,643		4,711		(3,598	)		152		(3,446	)		(1,598	)		34,310
Consumer non-real estate		3,542		8		(622	)		198		(424	)		355			3,481
Oil and gas		20,733		—		—			—		—			(10,601	)		10,132
Total	$	91,366	$	7,272	$	(5,114	)	$	388	$	(4,726	)	$	(9,949	)	$	83,963

Purchased Credit Deteriorated Loans

The Company has purchased loans, for which there was, at acquisition, evidence of more than insignificant deterioration of credit quality since origination. The credit-deteriorated loans purchased during the six-month periods ended June 30, 2022 and June 30, 2021 were as follows:

	Loans acquired with deteriorated credit quality
	(Dollars in thousands)
For the period ended June 30, 2022
Purchase price of loans at acquisition	$	661
Allowance for credit losses at acquisition		78
Par value of acquired loans at acquisition	$	739
For the period ended June 30, 2021
Purchase price of loans at acquisition	$	26,779
Allowance for credit losses at acquisition		7,272
Par value of acquired loans at acquisition	$	34,051

Collateral-Dependent Gross Loans Held for Investment by Collateral Type and Related Specific Allocation

The following table summarizes collateral-dependent gross loans held for investment by collateral type and the related specific allocation as follows:

	Collateral Type
	Real Estate		Business Assets		Energy Reserves		Other Assets		Total		Specific Allocation
	(Dollars in thousands)
As of June 30, 2022
Real estate:
Commercial real estate owner occupied	$	1,671	$	—	$	—	$	—	$	1,671	$	555
Commercial real estate non-owner occupied		1,146		—		—		—		1,146		214
Construction and development < 60 months		—		—		—		—		—		—
Construction residential real estate < 60 months		—		—		—		—		—		—
Residential real estate first lien		734		—		—		—		734		107
Residential real estate all other		34		—		—		—		34		15
Farmland		6,341		—		—		—		6,341		1,157
Commercial and agricultural non-real estate		—		4,441		—		5,344		9,785		3,837
Consumer non-real estate		—		—		—		39		39		35
Oil and gas		—		—		—		—		—		—
Total collateral-dependent loans held for investment	$	9,926	$	4,441	$	—	$	5,383	$	19,750	$	5,920
	Collateral Type
	Real Estate		Business Assets		Energy Reserves		Other Assets		Total		Specific Allocation
	(Dollars in thousands)
As of December 31, 2021
Real estate:
Commercial real estate owner occupied	$	1,952	$	—	$	—	$	—	$	1,952	$	576
Commercial real estate non-owner occupied		1,404		—		—		—		1,404		263
Construction and development < 60 months		—		—		—		—		—		—
Construction residential real estate < 60 months		—		—		—		—		—		—
Residential real estate first lien		871		—		—		—		871		143
Residential real estate all other		199		—		—		—		199		178
Farmland		8,703		—		—		—		8,703		1,805
Commercial and agricultural non-real estate		—		6,472		—		5,202		11,674		4,938
Consumer non-real estate		—		—		—		54		54		20
Oil and gas		—		—		—		—		—		—
Total collateral-dependent loans held for investment	$	13,129	$	6,472	$	—	$	5,256	$	24,857	$	7,923

Transfers from Loans and Premises and Equipment to Other Real Estate Owned and Repossessed Assets

Transfers from loans and premises and equipment to other real estate owned and repossessed assets during the periods presented are summarized as follows:

	Six Months Ended June 30,
	2022		2021
	(Dollars in thousands)
Other real estate owned	$	4,065	$	9,438
Repossessed assets		503		427
Total	$	4,568	$	9,865